REASONS OF THE COURT
(Given by Collins J)
 Tyrion Holdings Ltd (Tyrion) was formerly owned by Mr Blomfield. It acquired 50 per cent of the shares in a civil engineering and construction firm called Infrastructure NZ Ltd (INZ). The other shareholder in INZ was Mr Claydon, a civil engineer who was also the company’s managing director.
 In the months before Tyrion acquired its 50 per cent shareholding in INZ, Mr Claydon took a number of steps that contributed to INZ ceasing to trade soon after Tyrion acquired its shares. We refer to those steps as “the assets transfer”. The steps taken by Mr Claydon involved him forming a new company, Infrastructure & CivilWorks Ltd (ICW). The new company managed two construction projects that had previously been undertaken by INZ and acquired INZ’s vehicles and construction equipment after those items were repossessed by a finance company. Mr Claydon took these steps because he no longer trusted Mr Blomfield and because he wanted to protect the creditors of INZ. He also wished to preserve his reputation in the civil engineering and construction industry.
 Tyrion made application under s 174 of the Companies Act 1993, alleging that the assets transfer caused it unfair prejudice. It sought compensation based upon what it argued was the value of its shares in INZ immediately before Mr Claydon and ICW completed the assets transfer. INZ remains registered as a company. It has, however, no assets and did not participate in the appeal.
 Section 174(1) of the Companies Act provides:
174 Prejudiced shareholders
(1) A shareholder ... of a company ... who considers that the affairs of a company have been, ... conducted in a manner that is, or ... have been, ... oppressive, unfairly discriminatory, or unfairly prejudicial to him or her in that capacity ... may apply to the court for an order under this section.
 Relief may be ordered by a Court under s 174(2) of the Companies Act but only if it is just and equitable to do so. The relief that may be ordered includes “requiring the company or any other person to pay compensation ...”. That is the relief that Tyrion sought from Mr Claydon and ICW.
 Section 175 of the Companies Act deems certain conduct to be unfairly prejudicial for the purposes of an application under s 174. Included in the matters that are deemed to be unfairly prejudicial is a failure to comply with s 129 of the Companies Act.
 Under s 129 of the Companies Act a company must not enter into a major transaction unless the transaction is approved by special resolution. The definition of “major transaction” in s 129(2)(b) includes:
(b) the disposition of, or an agreement to dispose of, whether contingent or not, assets of the company the value of which is more than half the value of the company’s assets before the disposition ...
 “Assets” are defined in s 129(2) of the Companies Act, as including “property of any kind, whether tangible or intangible”. There was no special resolution authorising the assets transfer.
 In the High Court, Courtney J dismissed Tyrion’s application. She found that the assets transfer was not a major transaction in terms of s 129 of the Companies Act. She also found however, that Tyrion was unfairly prejudiced by the assets transfer. Courtney J also concluded it would not be just and equitable to award damages to Tyrion because of five factors:
(a) the value of INZ’s business at the time of the assets transfer;
(b) the effect of Mr Claydon’s actions on INZ;
(c) the minimal prospects that INZ had of continuing its business;
(d) Mr Blomfield’s conduct; and
(e) the fact Tyrion knew about INZ’s precarious financial position when it acquired its shares in INZ.
 The Judge, in a separate costs decision, directed Tyrion to pay indemnity costs for steps taken after a Calderbank offer had been made by Mr Claydon and ICW.
 The key issues raised by Tyrion’s appeal may be reduced to the following four questions:
(a) Did the High Court Judge err in finding that the assets transfer was not a major transaction in terms of s 129 of the Companies Act?
(b) Did the Judge err in not accepting Tyrion’s expert evidence and in accepting Mr Claydon and ICW’s expert’s evidence concerning the value of the shares acquired by Tyrion at the time of the alleged major transaction?
(c) Did the Judge err when taking into account Mr Blomfield’s conduct and Tyrion’s knowledge of INZ’s financial position at the time the shares were transferred to it?
(d) Did the Judge err when ordering Tyrion to pay indemnity costs for steps taken in the proceeding after the Calderbank offer expired?
 The first question raises issues as to whether or not there was a major transaction, thereby triggering the “unfairly prejudicial” provisions of s 174 of the Companies Act. As we explain however, little hinges on this question as Courtney J held that the conduct complained of caused unfair prejudice to Tyrion. That finding has not been challenged by Mr Claydon and ICW. The second and third questions focus upon whether or not Courtney J was correct when she decided it would not be fair and equitable to grant relief to Tyrion. The fourth question asks if it was appropriate to award indemnity costs in the circumstances of this case.
 It will already be apparent the real protagonists in this litigation are Mr Claydon and Mr Blomfield. By mid-2007, Mr Claydon and Mr Blomfield each owned 50 per cent of INZ with Mr Blomfield’s shares being held in the names of two of his companies, Blomfield Investments Ltd and Black Trading Ltd. In November 2008, another of Mr Blomfield’s companies, Black Rural Developments Ltd (Black Rural) acquired the shares that had been allocated to Mr Blomfield. Black Rural changed its name to Tyrion in 2012. The shareholder in Tyrion is now Mr O’Connor, who is one of Mr Blomfield’s associates. These arrangements were put in place after Mr Blomfield was adjudged bankrupt and when the companies that had previously held his shares struck financial difficulties.
The formation of INZ
 Before and during the events in question, Mr Blomfield had a number of business interests, including fast food franchises and a communications company. He was also involved in a property subdivision in Mangawhai. In 2005, Mr Blomfield suggested to Mr Claydon that they establish a civil engineering and construction business initially working on the Mangawhai subdivision. Mr Claydon agreed and as a consequence, INZ was incorporated in 2005.
 Mr Claydon’s evidence was that he paid for his shares in INZ but that the shareholders associated with Mr Blomfield failed to pay the $20,000 that Mr Claydon says they owed. Mr Blomfield’s evidence was that his contribution to INZ was to be by way of “sweat equity”. Courtney J rejected this explanation.
 It is common ground Mr Claydon worked full-time for INZ and that Mr Blomfield did not have a salaried role in the company. There is a dispute as to how much salary Mr Claydon was to be paid. Mr Claydon said he was to be paid $10,000 per month. Mr Blomfield, on the other hand, maintained Mr Claydon was to be paid $5,000 per month.
 In 2006, INZ commenced civil engineering work at the Mangawhai subdivision. By August 2006, however, the Mangawhai developer had run out of money. INZ was, by this time, owed $250,000. Mr Claydon started looking for other contracts, which resulted in INZ undertaking a number of construction and civil engineering projects, mainly for local councils.
 Towards the end of 2007, INZ entered into an agreement with UDC Finance (UDC) for the financing of trucks and earthmoving equipment for its projects. Between October 2007 and March 2008, INZ borrowed a total of $378,345.61 from UDC for a Mercedes truck, a Mitsubishi truck and three excavators. INZ also negotiated a floating credit facility of $600,000 with ANZ, secured by way of a general security agreement guaranteed by the directors.
Breakdown in the relationship between Mr Claydon and Mr Blomfield
 In the High Court, allegations and counter-allegations of misconduct were made by Mr Claydon and Mr Blomfield. It is not necessary to traverse all of those allegations. Suffice to record that in December 2007, Mr Claydon discovered Mr Blomfield had transferred $70,000 from INZ’s bank account to use for his own purposes. Mr Claydon’s evidence was that Mr Blomfield ignored his requests to return this money. In June 2008, Mr Blomfield transferred a further $30,000 from INZ’s bank account for his own purposes. This proved to be the “final straw” for Mr Claydon who, at this time, took steps to sever his connections with Mr Blomfield and to insulate himself from INZ which was, by this stage, in a precarious financial position. By mid-2008, the dispute between Mr Claydon and Mr Blomfield was common knowledge in the civil engineering and construction industry in the areas where INZ was operating. INZ’s bank had become so concerned that it had frozen INZ’s bank account.
The assets transfer
 In July 2008, Mr Claydon incorporated a new company, ICW. Mr Claydon is the sole director and shareholder of this company. Mr Claydon executed, on behalf of INZ, two agreements with ICW. The first of those agreements involved ICW undertaking to supply various management services to INZ. Under this arrangement, ICW managed two projects that had been commenced by INZ. Mr Claydon’s evidence was that ICW applied any profits received from those contracts towards settling INZ’s debts. He said ICW in fact ended up losing money on those projects. Under the second agreement, INZ agreed to lease its vehicles and equipment to ICW. This enabled ICW to pay the loan amounts to UDC while INZ’s bank account was frozen and avoid defaulting on the loan. However, when INZ ultimately defaulted on its loan obligations to UDC, the vehicles and equipment were repossessed and purchased at market rates by ICW from UDC.
 Mr Claydon’s explanation for taking these steps was that the relationship between himself and Mr Blomfield had deteriorated to such a point that INZ was no longer viable. Mr Claydon said in his evidence that it was clear that INZ was not going to succeed and that his personal reputation was beginning to suffer because of his association with Mr Blomfield. Mr Claydon said that ICW started to engage in road maintenance and other construction work that was quite separate from the local body contracts that INZ had undertaken.
 By August 2008, Mr Blomfield was aware that Mr Claydon had started a new business venture. He spoke to Mr Claydon and accused him of stealing INZ’s business and appropriating it for himself. According to Mr Blomfield, Mr Claydon acknowledged what he had done but also said that there was nothing Mr Blomfield could do about it.
 Over the next few months, Mr Blomfield and Mr Claydon exchanged emails, during which it was suggested Mr Claydon purchase Mr Blomfield’s interests in INZ. Nothing came of those proposals.
 In December 2008, Mr Blomfield uplifted a cheque for approximately $99,000 from the Waitakere Council payable to INZ. When Mr Claydon discovered what had happened he arranged for the cheque to be cancelled. Mr Blomfield managed, however, to intercept a second cheque for $99,000 from the Waitakere Council that was made out to INZ. Mr Blomfield used that money for his own purposes. In due course, INZ was reimbursed by the bank that wrongly allowed the money to be misappropriated by Mr Blomfield.
High Court judgment
 Tyrion’s proceeding in the High Court involved two causes of action, the first of which was for the orders that Tyrion sought under s 174 of the Companies Act. The second cause of action alleged various breaches of director’s duties by Mr Claydon. Courtney J dismissed both causes of action. Only the first cause of action based upon s 174 of the Companies Act was pursued in the appeal.
 Courtney J found that the assets transfer arranged by Mr Claydon to ICW did not constitute a major transaction under s 129 of the Companies Act. This conclusion was reached because there was no evidence of the value of INZ’s assets at the time of the transfers. Courtney J found, however, that in substance, INZ’s assets had been transferred to ICW and that the shareholders associated with Mr Blomfield’s interests were accordingly unfairly prejudiced.
 A number of experts gave evidence as to the value of the shares that Tyrion subsequently acquired at the time of the transfer of INZ’s undertakings to ICW. We explain in further detail at – the various approaches taken by the experts and their different conclusions. Suffice, for present purposes, to record that Courtney J accepted the valuation provided by a Mr Martin, an expert called by Mr Claydon and ICW, and as a consequence of his evidence the value of the shares acquired by Tyrion was held to be just $44,425.
 As noted earlier, Courtney J declined to grant any relief because she was not satisfied that it would be just and equitable to grant a remedy in the circumstances of this case. We have previously summarised at  the factors that persuaded Courtney J to reach this conclusion.
 In her costs judgment, Courtney J directed, amongst other matters, that Mr Claydon and his interests were to receive costs on a 2B basis up until 7 February 2018 and costs on an indemnity basis thereafter for the substantive hearing because a Calderbank offer that had been provided to Tyrion expired on 7 February 2018. The Calderbank offer was for $30,000. Courtney J considered it was unreasonable of Tyrion to have declined that offer.
 Considerable effort was expended in both the High Court and in this Court in arguing whether or not the assets transfer constituted a major transaction for the purposes of s 129 which in turn constituted conduct deemed to be unfairly prejudicial to Tyrion. Mr Blanchard QC properly acknowledged from the outset, however, that Courtney J’s finding that there was unfairly prejudicial conduct was independent of her findings that there had not been a major transaction. The finding that Tyrion was unfairly prejudiced has not been challenged on appeal. Thus, little hinges upon whether or not there was a major transaction.
 We will, however, for the sake of completeness, briefly address the issues raised by the first ground of appeal.
 Tyrion claimed that between July and December 2008, the assets transfer carried out by Mr Claydon essentially caused the business of INZ to be transferred to ICW. Tyrion said the assets transfer comprised the following transactions:
(a) the transfer of construction and earthmoving equipment as well as vehicles;
(b) the transfer of the benefit of various contracts that INZ had for civil engineering work and project management, including the benefit of unpaid invoices and work in progress;
(c) the transfer of business relationships;
(d) the transfer of money in INZ’s bank accounts;
(e) the transfer of employment relationships with various staff;
(f) the transfer of office equipment; and
(g) the transfer of goodwill and “branding”.
 Mr Napier criticised the approach taken by Courtney J, saying she had focused only on the transfer of the lease of construction and earthmoving equipment. Whilst Mr Napier was correct to say that this was the focus of Courtney J’s attention, for the reasons which we shall briefly explain, none of the other transactions we have summarised at  constituted a major transaction as defined in s 129 of the Companies Act for two reasons:
(a) there was no evidence to establish that the transactions in question involved the disposal of 50 per cent or more of the total value of the company’s assets; and
(b) a number of the transactions did not involve assets of INZ.
(a) Construction, earthmoving equipment and vehicles
 ICW acquired the construction and earthmoving equipment from UDC at market rates. The equipment in question was seized by UDC as a secured creditor after INZ defaulted on its obligations to UDC. Therefore, the construction and earthmoving equipment was disposed of by UDC and not Mr Claydon or INZ. There was also no evidence of vehicles being transferred from INZ to ICW. On the contrary, the evidence clearly showed that two trucks that were acquired by ICW that had previously been leased by INZ were purchased from UDC after they were repossessed from INZ.
(b) The benefit of various contracts for civil engineering work and project management including the benefit of unpaid invoices and work in progress
 Courtney J accepted Mr Claydon’s evidence that he did not transfer the benefit of any contracts. Rather, he said that ICW carried out INZ’s obligations under two contracts and in doing so incurred losses. Unsurprisingly, Tyrion could not attribute any value to these contracts. Courtney J concluded that any money received by ICW for completing the two projects that had been commenced by INZ was likely to have been used to pay INZ creditors. Tyrion has not put forward any reason for doubting this conclusion.
(c) The benefit of business relationships
 Tyrion was not able to identify any relationships that Mr Claydon moved to ICW, let alone place a value on those relationships.
(d) Money held in banks accounts
 There was no evidence of money held in INZ bank accounts being transferred to ICW. This is also not surprising because, at the relevant time, INZ’s bank accounts were frozen.
(e) Employment relations
 It is difficult to see how an employee is an asset as defined in s 129 of the Companies Act, which defines asset as “property of any kind whether tangible or intangible”. In any event, Mr Claydon’s evidence was that only he and a quantity surveyor were employed by INZ and that all other work was carried out by contractors. Tyrion was not able to contradict this evidence.
(f) Office equipment
 Tyrion failed to identify any office equipment that was transferred to ICW from INZ.
(g) Goodwill and “branding”
 Courtney J was not satisfied there was any significant goodwill that could attach to INZ by mid-2008. She observed that the dispute between the directors was common knowledge and that its bank accounts were frozen. INZ was no longer getting new work. This conclusion was supported by the evidence of Mr Campbell, INZ’s accountant, and Mr Martin, an independent forensic accountant, who said that no value could be ascribed to goodwill because a willing purchaser would not pay over and above the net value of tangible assets for a business that was providing a marginal return. Whilst Mr Napier was correct to point out that Mr Beylefeld, an accountant who gave evidence for Tyrion, said that INZ’s goodwill could be valued at $249,000 as at mid-2008, as we explain at –, we have major reservations about Mr Beylefeld’s methodology and see no basis upon which we could conclude that any goodwill and branding that was transferred constituted a major transaction as defined in s 129 of the Companies Act.
Value of the shares
 Three accountants gave evidence concerning the value of INZ as at mid-2008:
(a) Mr Beylefeld said the value of INZ at July 2008 was $464,000, meaning the value of Mr Blomfield’s half interest in INZ at that time was $232,000.
(b) Mr Campbell, the external accountant for INZ and is now the accountant for ICW. He said the value of INZ as at July 2008 was $86,000. The value of Mr Blomfield’s shares would therefore be $43,000.
(c) Mr Martin, an independent forensic accountant who gave evidence for Mr Claydon and ICW, said that the value of INZ in July 2008 was $88,850. The value of Mr Blomfield’s shares would therefore be $44,425.
 It is striking that there was such a divergence in the evidence concerning the value of INZ as at July 2008 with Mr Campbell and Mr Martin being close in their assessments and Mr Beylefeld having such a widely different opinion from them. Courtney J decided not to place much reliance on Mr Campbell’s evidence because of his close association with Mr Claydon and ICW. She did, however, agree with the approach and conclusions reached by Mr Martin. Although Mr Napier raised a number of criticisms about Mr Campbell’s methodology and assessments, the real contest was between the evidence of Mr Beylefeld and Mr Martin.
 There were six key points of difference in the approaches taken and conclusions reached by Mr Beylefeld and Mr Martin. We will examine each of those differences in –.
(a) Modified capital asset pricing model
 Mr Beylefeld explained that the modified capital asset pricing model (MCAPM) is “the most commonly applied theoretical model” that is applied to the estimated Earnings Before Interest, Tax, Depreciation and Proprietor salaries (EBITDP) when calculating a business’s enterprise value. Mr Beylefeld estimated the expected future maintainable earnings (FME) of INZ to be $275,000 as at July 2008. To this he added an EBITDP multiplier of 2.5, in accordance with what he said was an appropriate MCAPM, reaching an enterprise value for the business of $688,000 as at July 2008.
 There was, however, considerable disagreement about the appropriateness of an MCAPM when calculating the value of INZ. Mr Martin said that an MCAPM was an academic model that was used primarily for mergers and acquisitions in the investment industry to determine what prices might be paid for publicly traded shares on the stock exchange. Of more significance was the basis upon which Mr Beylefeld derived the 2.5 multiplier he used. He said in his evidence that this was the mid-point between two and three, which he said was the MCAPM “framework” derived from BizStats New Zealand Ltd research. There is, however, much force in Mr Blanchard’s criticism of Mr Beylefeld’s evidence when he submitted that nowhere did Mr Beylefeld explain what specific analysis he carried out to reach the numbers he relied upon. In the absence of a clear explanation as to the credibility of the underlying calculations of INZ’s enterprise value, Courtney J was entitled to reject this aspect of Mr Beylefeld’s evidence.
(b) MYOB information
 Mr Beylefeld placed considerable weight on the MYOB information from INZ. The MYOB records showed the EBITDP for INZ as at July 2008 to be $202,000. That was based on a four-month period. In contrast, the MYOB records showed the EBITDP for the year ending 31 March 2008 to be negative $66,000. In the previous financial year, the MYOB records showed the EBITDP to be $482,000. It is clear the EBITDP fluctuated dramatically during the 28-month period to which the MYOB records related. Mr Beylefeld also increased the EBITDP shown in the MYOB records for the four-month period ending July 2008 to $275,000 when calculating the FME.
 Mr Campbell and Mr Martin both explained in their evidence that the MYOB figures for INZ were a source of information that should be examined when calculating the value of the company. They both, however, stressed that there were considerable risks in relying solely on the MYOB records in this case. Mr Martin was concerned the MYOB records could produce misleading assessments because:
(a) the MYOB figures for July 2008 were based on just four months’ information; and
(b) the MYOB figures for July 2008 did not recognise deferred revenue and other standard adjustments.
 Although we have not placed much weight on Mr Campbell’s evidence, it is significant that he had major misgivings about the MYOB data. These misgivings were based upon his experience as the external accountant for INZ and the fact that they did not reflect reconciliations and adjustments that were always made when compiling the true financial records for INZ. Mr Martin’s evidence was consistent with that of Mr Campbell’s on this point. Having reviewed this aspect of the accountant’s evidence, we agree with Courtney J’s assessment that considerable caution needed to be exercised before relying upon the MYOB data in this case.
(c) Normalisation of bad debt
 All three accountants agreed that the income for INZ for the financial year ending 31 March 2008 had been reduced by $390,000, as a result of writing off bad debt. The point of difference between the accountants related to how that bad debt should be treated. Mr Beylefeld said the 2008 bad debt should not be treated as a regular expense. Mr Martin and Mr Campbell however, believed that the bad debts incurred by INZ in 2008 should not be considered as extraordinary or abnormal because of the type of business activity that INZ was engaged in. While Courtney J did not endeavour to resolve this particular dispute between the accountants, it is clear that overall she favoured the evidence of Mr Martin. From the outset INZ incurred serious financial setbacks in relation to the Mangawhai subdivision. Construction and subdivision work can be notoriously precarious and unpredictable. Mr Martin’s cautious approach to the 2008 bad debt was entirely justified when assessing the value of INZ as at July 2008.
(d) Discount for the global financial crisis
 Tyrion endeavoured to argue that Mr Martin was wrong to factor in the global financial crisis when assessing the value of INZ as at July 2008. This aspect of Tyrion’s case was based on evidence that suggested that ready-mixed concrete sales figures had not started to decline by July 2008. This argument is not persuasive. Ready-mixed concrete sales are but one factor and relate only to construction that is underway. It is not an indicator of future work that is pivotal when assessing the value of a construction company. The construction industry in New Zealand in July 2008 was already feeling the effects of what shortly became the global financial crisis. Bridgecorp, a significant funder of property developers, had already collapsed in 2007. Mr Martin was fully justified in factoring the global financial crisis into his calculations of the value of INZ as at July 2008.
(e) Loan to a subsidiary
 A fifth difference between the experts was whether a $90,000 loan from INZ to its subsidiary company should have been included as an asset of INZ. It was important, however, to have regard to the assets of the subsidiary company. Mr Blanchard correctly submitted there was no evidence the subsidiary company had any assets and that in all likelihood it did not, as all assets of any value as at July 2008 were held by INZ. In these circumstances, we can see nothing wrong in Mr Martin’s decision not to include the $90,000 as an asset of INZ.
 As noted at , Mr Beylefeld valued the goodwill of INZ as being $249,000 as at July 2008. Courtney J also rejected this aspect of his evidence, and preferred for the following reasons the approach taken by Mr Martin, who ascribed no goodwill to the business:
(a) INZ had been operating for just three years and therefore “had a limited track record”.
(b) INZ’s reputation had suffered because of the dispute between Mr Claydon and Mr Blomfield.
(c) INZ had no workforce and relied primarily on subcontractors.
 To these factors we would add that INZ was trying to compete in a precarious environment. Mr Martin was correct when he said a willing purchaser, fully appraised of INZ’s circumstances, would not be likely to pay anything for the goodwill of the company in July 2008.
 This analysis of the accounting evidence leads us to conclude that Courtney J was fully justified in accepting the evidence of Mr Martin, when he said the value of INZ as at July 2008 was $88,850 and that Tyrion could expect no more than $44,425 as compensation for the shares it acquired.
Mr Blomfield’s conduct/Tyrion’s knowledge of INZ’s financial position
 The third ground of appeal alleges Courtney J erred by taking into account Mr Blomfield’s conduct and Tyrion’s knowledge of INZ’s financial position at the time Tyrion acquired its shares in INZ. Tyrion maintains that these matters needed to be affirmatively pleaded and that it was prejudiced by the absence of such a pleading.
Was an affirmative defence required?
 An affirmative defence is one that relies upon facts beyond the admissions and denials of the facts pleaded in a statement of claim.
 Under the High Court Rules 2016, an affirmative defence must be pleaded and if such a defence is pleaded, then the plaintiff is required to file a reply. The purpose of these rules is to ensure the parties understand their opponent’s case and to ensure the Court can properly understand and determine the issues in dispute.
 Mr Blomfield’s conduct and Tyrion’s knowledge of INZ’s precarious financial position when it acquired its shares in INZ were matters that Courtney J needed to consider when assessing whether it was just and equitable to grant the relief sought by Tyrion. These were matters that related to the way Courtney J would exercise her discretion when considering whether a remedy was appropriate, rather than whether Mr Claydon and his interests had acted in a way that unfairly prejudiced Tyrion. These were matters that were within the knowledge of Tyrion when the proceeding was commenced. They were matters that were traversed in the evidence provided by Mr Claydon and ICW in advance of the hearing. Tyrion could not have been genuinely surprised or prejudiced when Mr Claydon and ICW submitted to Courtney J that Mr Blomfield’s conduct, and Tyrion’s knowledge of the precarious nature of INZ’s financial position were factors that weighed against her exercising her discretion in Tyrion’s favour.
Mr Blomfield’s conduct
 Courtney J referred to four aspects of Mr Blomfield’s conduct when deciding that it would not be just and equitable to grant the relief sought by Tyrion:
(a) Mr Blomfield personally withdrew $70,000 from INZ in December 2007 and a further $30,000 in June 2008.
(b) In 2008, two of Mr Blomfield’s companies obtained loans from INZ. Those loans were never repaid.
(c) In August 2008, when Mr Blomfield became concerned that Mr Claydon was transferring INZ’s assets to ICW, he took no meaningful steps to prevent Mr Claydon from taking that action.
(d) In December 2008, Mr Blomfield misappropriated $99,000 that was intended to be paid to INZ.
 In his submissions, Mr Napier criticised Courtney J’s reliance on just one of these matters, namely Mr Blomfield’s withdrawal from INZ of $70,000 in December 2007 and $30,000 in June 2008. Mr Napier raised concerns about a number of other references to Mr Blomfield’s conduct in the High Court judgment. We note, however, that the only matters relating to Mr Blomfield’s conduct referred to by Courtney J when considering whether it would be just and equitable to grant relief to Tyrion are the four matters we have summarised at . Mr Napier’s decision not to refer to the matters we have summarised at (b), (c) and (d) leads us to infer that no issue is taken with Courtney J’s reliance on those matters. Thus, we will only examine the criticisms levelled at Mr Blomfield for withdrawing from INZ $70,000 in December 2007 and $30,000 in June 2008.
 These withdrawals were referred to by Mr Claydon in his written brief of evidence when he said that neither withdrawal was discussed with him and that he did not authorise Mr Blomfield taking this money. Mr Claydon said he only discovered the money had been taken after checking INZ’s bank accounts.
 Mr Blomfield endeavoured to explain his actions in his reply brief of evidence. The fact he addressed this matter in his reply brief undermines the complaint that this issue was not pleaded as an affirmative defence.
 Mr Blomfield acknowledged taking the money and said that he did so to recoup costs he had incurred “for the office and staff” of INZ, which he said he was funding through his other entities. Mr Blomfield also said he was mindful that his shareholding was potentially going to be worthless if Mr Clayton “was successful in stealing the business”.
 Courtney J described this aspect of Mr Blomfield’s evidence as “unconvincing”. It is easy to understand why. The following five facts demonstrate that Mr Blomfield had no real excuse for withdrawing the funds he took from INZ:
(a) The accounts of INZ show that it was paying for the rent and office expenses, not Mr Blomfield.
(b) Mr Blomfield could not point to any agreement that would have allowed him to withdraw the money in order to recoup expenses he said he had incurred.
(c) The withdrawal in December 2007 was seven to eight months before Mr Claydon set up ICW and took the steps that Tyrion complains of.
(d) The withdrawal in June 2008 was at the time Mr Blomfield said he was concerned about INZ’s financial viability. His removal of $30,000 at that time breached his responsibilities to the company.
(e) Mr Blomfield surreptitiously removed the money from INZ’s bank account without explanation.
 This evidence fully justified Courtney J’s decision that it would not be just and equitable to grant relief to Tyrion. In a similar vein, no issue can be taken with Courtney J’s reliance upon the other three matters that we have referred to at , when concluding that it would not be just and equitable to grant relief to Tyrion. It is significant that Mr Napier took no issue with those three matters.
Tyrion’s knowledge of INZ’s financial position when it acquired its shares
 In deciding that it would not be just and equitable to grant relief to Tyrion, Courtney J took into account that Tyrion knew about INZ’s difficult financial position when it acquired its shares in that company in November 2008.
 Mr Napier criticised this aspect of the High Court judgment on the following grounds:
(a) Tyrion’s knowledge of INZ’s financial position should have been pleaded as an affirmative defence; and
(b) Tyrion was prejudiced by the absence of an affirmative pleading as it would have adduced further evidence on this issue to the effect that Tyrion’s acquisition of its shares in INZ was simply a mechanism to ensure Mr Blomfield and his interests had a means of trying to obtain a remedy for the alleged misappropriation of INZ’s business by Mr Claydon and ICW.
 There are two reasons why we do not accept an affirmative pleading was required in relation to Tyrion’s knowledge of INZ’s financial position when it acquired its shares:
(a) This was an issue that Tyrion must have appreciated was a major hurdle to its claim for relief. In Bermuda Cable Vision Ltd v Colicia Trust Co Ltd, Lord Steyn made it clear that prior knowledge of the matters complained of by an applicant will almost always be a relevant consideration in deciding cases under a provision equivalent to s 174 of the Companies Act.  The same caution was expressed by this Court in Gavigan v Eichelbaum, in which Ks P explained that relief under s 174 may not be available for events that the applicant knew about prior to acquiring their shares. These judicial cautions should have been fully understood by Tyrion before the hearing. It was therefore not necessary for Mr Claydon and his interests to affirmatively plead that Tyrion knew about INZ’s precarious financial position at the time it acquired its shares because it fully knew this was the case.
(b) This issue solely relates to Courtney J’s decision not to grant relief. It is therefore not an affirmative defence but a matter the Court was invited to take into account when determining that it would not be just and equitable to grant relief. A wide range of factors can inform the inquiry into what is just and equitable. The legal right to relief from prejudicial conduct may be tempered by the equitable considerations arising from the conduct of the parties.
 In this Court, Tyrion applied for leave to adduce a further affidavit from Mr Blomfield, explaining the share ownership of Tyrion. The essence of that evidence was that Tyrion acquired the shares held by Black Trading and Blomfield Investments on 21 November 2008. Subsequently, Mr Blomfield’s shares in Tyrion were transferred to his domestic partner and then to Mr O’Connor. Mr Blomfield also says in his affidavit that this litigation was to be funded by Mr O’Connor and Tyrion’s solicitor on the basis that Mr O’Connor, the solicitor and Blomfield Investments would share the net proceeds of any successful judgment.
 These arrangements for funding the litigation were not disclosed to Courtney J but, in any event, it is impossible to comprehend how such arrangements could impact on the obvious conclusion reached by Courtney J, namely that Tyrion acquired its shares in INZ knowing that the company was in a precarious financial position. The evidence that Mr Blomfield now wishes to adduce raises a number of questions about the funding arrangements for this proceeding. These arrangements may not reflect positively upon him and his interests. They were, however, matters that could easily have been disclosed prior to the High Court hearing if they were genuinely relevant to the way Courtney J would exercise her discretion. We are satisfied they were not relevant to that issue and are therefore matters that are neither fresh or cogent and should not be admitted.
 On 26 January 2018, Mr Claydon and ICW sent Tyrion a Calderbank offer of $30,000 that was to expire on 7 February 2018. The four-day trial commenced on 12 February 2018.
 In her costs judgment, Courtney J awarded Mr Claydon and ICW indemnity costs from 7 February 2018.
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In doing so, she observed that “[t]his was a case in which neither of the protagonists emerged in a good light”. She also said, however, that Tyrion had been unreasonable in not accepting the Calderbank offer and that as a consequence, should be required to pay indemnity costs for the steps taken after 7 February 2018.  A clear distinction is drawn in the High Court Rules between “increased costs” and “indemnity costs”. The circumstances in which a court may order a party to pay increased costs include where they fail, “without reasonable justification, to accept an offer of settlement”. Indemnity costs may be awarded in a number of circumstances, including where a party has “acted vexatiously, frivolously, improperly, or unnecessarily in ... continuing... a proceeding”.  This Court has previously explained that indemnity costs “are exceptional and require exceptionally bad behaviour. That is why to justify an order for such costs the misconduct must be ‘flagrant’”.  In the present case, the litigation was rigorously contested by the two principal protagonists, whose relationship had become marked by distrust and intransigence. While Courtney J was correct to describe Tyrion’s decision to reject the Calderbank offer as being unreasonable, its conduct, and that of Mr Blomfield, fell short of the high threshold that must be satisfied before an award of indemnity costs is justified. On the other hand, Tyrion’s conduct, as described by Courtney J, mirrored the conduct required for an uplift of costs.  In our assessment, Courtney J was right to conclude that Tyrion should pay more than the standard 2B costs for steps taken after the expiration of the Calderbank offer. Its unreasonable conduct can, however, be appropriately reflected in an uplift in costs of 50 per cent on scale 2B for the steps taken after 7 February 2018. Ms Hill, who argued this part of the case for the respondents, acknowledged that an uplift of costs was an available option in this case. Result  The application to adduce further evidence is declined.  The appeal against the substantive decision of the High Court is dismissed.  The appeal against the High Court costs judgment is allowed. The order for indemnity costs for steps taken after the expiration of the Calderbank letter is quashed and substituted with an order that Tyrion pay a 50 per cent increase in costs on a scale 2B basis for the steps taken after 7 February 2018.  Mr Claydon and ICW are entitled to one award of costs in this Court for a standard appeal on a band A basis and usual disbursements. We certify for a second counsel. ------------------------------------------------------------------  Companies Act 1993, s 174(2)(b).  Tyrion Holdings Ltd v Infrastructure NZ Ltd  NZHC 1899 [High Court judgment].  At .  Tyrion Holdings Ltd v Infrastructure NZ Ltd  NZHC 2856 [Costs judgment].  High Court judgment, above 2, at .  At .  At .  At .  Costs judgment, above n 4.  At .  High Court judgment, above n 2, at .  At .  At .  At .  At .  Manukau Golf Club Inc v Shoye Venture Ltd  NZCA 154, (2012) 21 PRNZ 235 at .  High Court Rules 2016, rr 5.48(4) and 5.62.  High Court judgment, above n 2, at .  At .  At .  Bermuda Cablevision Ltd v Colica Trust Co Ltd  AC 198 (PC) at 212.  Gavigan v Eichelbaum  NZCA 442,  2 NZLR 530.  Lawrence v Glynbrook 2001 Ltd  NZHC 2876 at –.  Sturgess v Dunphy  NZCA 266 at .  Costs judgment, above n 4, at .  At .  High Court Rules 2016, r 14.6(3)(b)(v).  Rule 14.6(4)(a).  Bradbury v Westpac Banking Corp  NZCA 234,  3 NZLR 400 at ; citing Prebble v Awatere Huata (No 2)  NZSC 18,  2 NZLR 467 at .